Letter from a Former Director of GGM

Dear Shareholder:

I was on the Board of Directors from 1993 to 2008, when I had to resign for health reasons. I became involved here again when shareholders called me for my GGM Board records and advice in 2009. The manager threatened them with eviction for no legitimate reason and 3 current directors, who have the same records I do, refused to help those poor, frightened shareholders. When I served on the Board with these 3 directors, I always insisted that we manage GGM legally and properly. After I was diagnosed with cancer in 2003, I spent the next 5 years training the other directors so GGM would not fall apart when I left. Quite frankly, I stayed on the Board as long as I could because I did 99% of the work and the others showed up at meetings. Now they operate in deliberate violation of the GGM bylaws, California laws, and good business practices. They know better and you deserve better.

GGM is a small HUD low income, affordable housing cooperative, but there are more employees working here today than in its 37 year history. They also get paid a lot more than any employee I ever worked with in all my years on the Board, but what are they doing to justify taking so much of your money? In my 21 year relationship with GGM, I have never seen worse management than you are getting from this Board and their employees – and Garden Grove Manor has had some terrible management companies! This Board gives their employees too much power and not enough supervision. Employees do not have the same investment in GGM that shareholders have. When the HUD mortgage is paid off in 2013, GGM will not need HUD management any more. GGM will need a company certified in California to manage community associations. The current employees do not qualify, so you could say it is in their best interest to keep Garden Grove Manor a HUD property as long as possible.

In 2008 HUD threatened to foreclose on your mortgage when HUD owed GGM nearly 4 years of Section 8 payments. HUD has the power to sell GGM to a buyer who would turn it into more expensive rental apartments. Or HUD could force GGM to refinance the mortgage, giving shareholders hundreds of thousands of dollars in new debt to pay and adding 30 years or more to the existing HUD loan. But that didn’t happen because GGM had over $300,000 in reserve due to our good financial management. Today GGM is short of money again and in worse financial danger than we were in 2008. Why has the Board hired new lawyers who are experts in HUD loans?

If you recall the Board of Directors, 5 Board members will be elected this month and each director will serve for 3 years. The mortgage is scheduled to be paid off in October 2013 during their 3-year terms, but that will depend on how you vote and how GGM is managed after the recall election. If you want the mortgage to be paid off in 2013, you must elect 5 Board members who will manage GGM properly, stop unnecessary spending, follow the GGM bylaws and California law, operate openly, and follow good business practices. The current Board is not doing any of these things.

You have a clear choice in the recall election. In the past year, your neighbors have been trying to uncover what is really going on here. They hired an independent Inspector of Election so this month you will have your first election in 4 years. They successfully sued the Board to keep them from interfering in the recall election and to get the GGM records that all shareholders are entitled to see. They spent the last year studying the problems facing GGM to find solutions before it’s too late. Five of them are candidates for the Board of Directors. With your votes, they will work hard to protect all shareholders’ rights, protect your investment in your family’s home, bring legal and financial stability back to GGM, and make sure the HUD mortgage gets paid off on schedule in October 2013 so you receive the benefits of your investment. I urge you to vote YES to recall the Board of Directors and then vote for Nelson Cuervo, Milina Kasalian, Keith Campbell, Alicia Boatman and Tom DePalma.

Sincerely,

Terrie Rosas


Terrie Rosas is a former resident of Garden Grove Manor and served on the Board of Directors from 1993 to 2008.